Introductory BSA/AML Examiner School, Providence, RI

Suspicious Activity Monitoring 5. Transaction Testing Procedure:

• Review the selected accounts for unusual activity. If the examiner identifies unusual activity, review customer information for indications that the activity is typical for the customer (i.e., the sort of activity in which the customer is normally expected to engage). When reviewing for unusual activity, consider the following:  For individual customers, whether the activity is consistent with CDD information (e.g., occupation, expected account activity, and sources of funds and wealth).  For business customers, whether the activity is consistent with CDD information (e.g., type of business, size, location, and target market).

Suspicious Activity Monitoring 5. Transaction Testing Procedures:

• Determine whether the transaction or surveillance suspicious activity monitoring system detected the activity that the examiner identified as unusual. • For transactions identified as unusual, discuss the transactions with management. Determine whether the account officer demonstrates knowledge of the customer and the unusual transactions. After examining the available facts, determine whether management knows of a reasonable explanation for the transactions. • Determine whether the bank has failed to identify any reportable suspicious activity.